Professional Documents
Culture Documents
S. ll
116TH CONGRESS
1ST SESSION
A BILL
To amend the Internal Revenue Code of 1986 to permit
withdrawals from certain retirement plans for repayment
of student loan debt, and for other purposes.
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1 SEC. 2. WITHDRAWALS FOR HIGHER EDUCATION EX-
2 PENSES.
3
1 apply without regard to any requirement to
2 demonstrate financial need or hardship, or
3 to demonstrate that other assets are not
4 available to pay the qualified higher edu-
5 cation expenses.
6 ‘‘(iv) ADDITIONAL TAX UNDER SEC-
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1 (c) 457 PLANS.—Paragraph (1) of section 457(d) of
2 the Internal Revenue Code of 1986 is amended by adding
3 at the end the following: ‘‘Under rules similar to the rules
4 of section 401(k)(14)(C) (and without regard to whether
5 the expenses are unforeseen), a distribution shall be treat-
6 ed as made by reason of unforeseen emergency to the ex-
7 tent that the aggregate amount of such distributions dur-
8 ing the taxable year does not exceed the lesser of the
9 amount paid by the taxpayer for qualified higher edu-
10 cation expenses during such taxable year, or $5,250.’’.
11 (d) EFFECTIVE DATE.—The amendment made by
12 this section shall apply to distributions made after Decem-
13 ber 31, 2019.
14 SEC. 3. PENALTY-FREE WITHDRAWALS FROM IRAS FOR
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1 (b) EFFECTIVE DATE.—The amendment made by
2 this section shall apply to distributions made after Decem-
3 ber 31, 2019.
4 SEC. 4. EXCLUSION OF DISTRIBUTIONS FOR EDUCATIONAL
5 EXPENSES.
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1 ‘‘(B) any distribution from an individual
2 retirement account (as defined in section
3 408(a)) to which section 72(t)(2)(E) applies.
4 ‘‘(2) DISTRIBUTIONS MUST OTHERWISE BE IN-
5 CLUDIBLE.—
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1 ‘‘and’’ at the end of subparagraph (B), and by
2 inserting after subparagraph (B) the following
3 new subparagraph:
4 ‘‘(C) a distribution from a qualified cash
5 or deferred arrangement (as defined in section
6 401(k)(2)), an annuity contract described in
7 section 403(b), an eligible deferred compensa-
8 tion plan described in section 457(b) which is
9 maintained by an eligible employer described in
10 section 457(e)(1)(A), or an individual retire-
11 ment account (as defined in section 408(a))
12 which is excluded from gross income of the dis-
13 tributee under section 402(m) (other than any
14 portion of such a distribution which is attrib-
15 utable to the repayment of a loan described in
16 section 72(t)(7)(C)), and’’.
17 (B) COORDINATION WITH WAIVER OF PEN-
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1 with a distribution which is excluded from gross in-
2 come under section 402(m)’’.
3 (c) EFFECTIVE DATE.—The amendment made by
4 this section shall apply to distributions made after Decem-
5 ber 31, 2019.
6 SEC. 5. INCLUSION OF EMPLOYER STUDENT LOAN PAY-
8 GRAMS.
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1 ‘‘which is excluded from gross income under section 127
2 or is’’ after ‘‘or for any amount’’.
3 (c) EFFECTIVE DATE.—The amendments made by
4 this section shall apply to taxable years beginning after
5 December 31, 2019.
6 SEC. 6. REPEAL OF CAP ON DEDUCTION FOR INTEREST ON
7 EDUCATION LOANS.
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1 SEC. 7. EMPLOYER ROTH CONTRIBUTIONS.
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1 (C) by adding at the end the following new
2 subparagraph:
3 ‘‘(B) in the case of a qualified cash or de-
4 ferred arrangement (as defined in section
5 401(k)(2)), to have the employee’s employer
6 make designated Roth employer contributions
7 in lieu of all or a portion of the matching or
8 nonelective contributions the employee is other-
9 wise eligible to receive under the arrange-
10 ment.’’.
11 (2) Paragraph (2)(A) of section 402A(b) of
12 such Code is amended by striking ‘‘of each em-
13 ployee’’ and inserting ‘‘and designated Roth em-
14 ployer contributions with respect to each employee’’.
15 (3) Subparagraph (B) of section 402A(d)(2) of
16 such Code is amended by inserting ‘‘, or elected to
17 have made a designated Roth employer contribu-
18 tion,’’ after ‘‘designated Roth contribution’’ both
19 places it appears in clauses (i) and (ii).
20 (c) DESIGNATED ROTH EMPLOYER CONTRIBU-
21 TION.—Subsection (c) of section 402A of the Internal
22 Revenue Code of 1986 is amended—
23 (1) by inserting ‘‘AND DESIGNATED ROTH EM-
24 PLOYER CONTRIBUTIONS’’ after ‘‘DESIGNATED
25 ROTH CONTRIBUTIONS’’ in the heading, and
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1 (2) by adding at the end the following new
2 paragraph:
3 ‘‘(5) DESIGNATED ROTH EMPLOYER CONTRIBU-
4 TION.—
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1 ‘‘(C) DESIGNATION LIMITS.—The amount
2 of matching contributions and qualified nonelec-
3 tive contributions which an employee may des-
4 ignate under subparagraph (A) shall not exceed
5 the excess (if any) of—
6 ‘‘(i) the maximum amount of such
7 contributions excludable from gross income
8 of the employee for the taxable year (with-
9 out regard to this section), over
10 ‘‘(ii) the aggregate amount of such
11 contributions with respect to the employee
12 for the taxable year which the employee
13 does not designate under subparagraph
14 (A).’’.
15 (d) EFFECTIVE DATE.—The amendments made by
16 this section shall apply to contributions made in taxable
17 years beginning after December 31, 2019.
18 SEC. 8. MAXIMUM CONTRIBUTIONS.
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1 (A) by striking ‘‘$15,000’’ and inserting
2 ‘‘$25,000’’,
3 (B) by striking ‘‘December 31, 2006’’ and
4 inserting ‘‘December 31, 2020’’, and
5 (C) by striking ‘‘July 1, 2005’’ and insert-
6 ing ‘‘July 1, 2019’’.
7 (3) CONFORMING AMENDMENT.—Clause (ii) of
8 section 402(g)(7)(A) of such Code is amended by
9 striking ‘‘$15,000’’ and inserting ‘‘$25,000’’.
10 (b) 457 PLANS.—
11 (1) IN GENERAL.—Subparagraph (A) of section
12 457(e)(15) of the Internal Revenue Code of 1986 is
13 amended by striking ‘‘$15,000’’ and inserting
14 ‘‘$25,000’’.
15 (2) COST-OF-LIVING ADJUSTMENT.—Subpara-
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1 is amended by adding at the end the following new para-
2 graph:
3 ‘‘(15) EMPLOYED INDIVIDUAL ARRANGE-
4 MENT.—
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1 ‘‘(B) DISTRIBUTION, ETC. RULES TO
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